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Attorney: Federal estate tax laws discriminate against PR residents


Attorney Gregorio Igartúa

By The Star Staff


Federal inheritance estate tax laws discriminate against Puerto Rico residents, preventing them from enjoying certain tax exemptions available to residents in the mainland U.S., a pro-statehood lawyer charged Wednesday.


Attorney Gregorio Igartúa wrote to U.S. Attorney General Merrick Garland denouncing the discriminatory treatment. He said the U.S. citizens of Puerto Rico are classified as non-resident aliens for federal estate tax purposes.


“The law provides for unequal and inferior tax exemption by arbitrary treatment,” he wrote.

The law in question states that every U.S. citizen who is born or naturalized in Puerto Rico and is a resident of Puerto Rico at the time of death is considered a non-resident alien for U.S. tax purposes.


“As a consequence, American citizens residing in the states enjoy an exemption of millions of dollars or nearly $12 million while this amount is not enjoyed by those in Puerto Rico, which is limited to $60,000,” Igartúa said in the letter. “With this scheme, the federal government denies us the estate tax exemption enjoyed by those residents in the states.”


Igartúa said the policy cannot be allowed to continue because it further evidences it is a policy that is illegal and hurts Puerto Ricans economically.


He said Puerto Rico is a territory that has been more assimilated to be like a state.


He asked for the identification of the legal source supporting the policy of qualifying islanders as non-resident aliens. He also said it was taxation without representation.


The pro-statehood attorney wants Puerto Rico to be treated the same as the states. He has gone to court to seek the elimination of the so-called insular cases, which allow for discrimination against Puerto Rico. He is paying close attention to a case pending at the U.S. Supreme Court.


The case involves José Luis Vaello Madero, an American citizen who was born in Puerto Rico. While living in New York in 2012, he became seriously ill and was unable to work, so he began receiving Supplemental Security Income (SSI), a federal welfare program for people who cannot support themselves. But when he moved back to Puerto Rico to be closer to his family, Vaello Madero lost his SSI benefits because, by law, Puerto Rico residents are excluded from the program.


The Supreme Court last year heard arguments on whether that exclusion violates the U.S. Constitution. Vaello Madero and his supporters want the justices to transform that legal landscape by striking down the SSI exclusion — and to do so by applying a heightened constitutional test.


Amid the legal wrangling, both sides agree that Vaello Madero’s loss of benefits was unjust. But while Vaello Madero seeks a judicial solution, the Biden administration says that Congress, not the court, should fix the problem by extending SSI benefits to all Americans, no matter where they live.

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